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Early Rains Expected to Drive Australian Farming Recovery

Early Rains Expected to Drive Australian Farming Recovery

(Bloomberg) --

Widespread rains around Australia this year, and a positive weather outlook for the coming months, are expected to spark a recovery in several key agricultural sectors after years of drought curbed output, according to the Australian Bureau of Agricultural and Resource Economics and Sciences.

“The seasonal outlook for the autumn of 2020 is positive, providing the basis of a recovery in Australian crop production and allowing for rebuilding of sheep flocks and cattle herds,” it said in a report.

Early rains have improved production conditions in some key growing areas of eastern Australia, and Bureau of Meteorology forecasts suggest higher-than-average rainfall across most of the country in coming months, with a high chance autumn and winter rains will suffice to sustain crop and pasture output.

Australian growers rely on imported inputs, with some concern that farming chemicals could be in short supply ahead of winter crop planting after factories in China were shuttered during that country’s coronavirus outbreak.

Shortages or disruptions haven’t been widespread, but could cut profitability, according to the report. “It will be important for business and government to continue actively monitoring and managing” the risks, said Abares Executive Director Steve Hatfield-Dodds.

A spike in panic buying led to shortages of some products in grocery stores, as consumers stripped shelves of staples like pasta, flour and tinned foods. However, concerns about food security are “misplaced,” Hatfield-Dodds said.

The country exports about 70% of its agricultural production and imports about 11% of food by value, according to the report, and shortages are a result of logistics taking time to adapt to the surge in buying. Any shortages of imported goods, or higher prices, are likely to “disappoint or inconvenience” some consumers, but not affect food security.

©2020 Bloomberg L.P.